Healey Quietly Promotes New Local Taxes to Help Cities and Towns

The Massachusetts Fiscal Alliance has quickly taken aim at Governor Maura Healey’s sweeping local option tax hike proposal, which would give cities and towns across Massachusetts broad new authority to raise taxes on residents and small businesses. Municipalities, in general, say they are constrained by Proposition 2 1/2 and voters are often resistant to override measures.

Under the Governor’s plan, municipalities would be allowed to:

• Increase the local meals tax by over 30%, from 0.75% to 1%

• Raise the local lodging tax up to 7% (7.5% in Boston)

• Impose a new surcharge of up to 5% on motor vehicle excise bills, effectively tripling them

The  Fiscal Alliance objects to the stealth and the substance of the proposal.

“At a time when working families are already struggling to keep up with inflation, rising energy costs, and housing expenses, Governor Healey’s response is to make it even easier for local governments to raise taxes. Instead of cutting waste or resetting state spending priorities, she’s passing the buck to local boards and pretending it’s some kind of major reform,” said Paul Diego Craney, Executive Director of the Massachusetts Fiscal Alliance.

Despite record-breaking state spending, Governor Healey’s administration has allowed local aid to cities and towns to remain flat for consecutive budgets, leaving municipalities to fend for themselves. Meanwhile, the Fiscal Alliance notes, the state has devoted billions of dollars to fund housing, shelter, and services for migrants and new arrivals.

“Governor Healey continues to prioritize unchecked spending on the state’s costly migrant programs while cities and towns are told to raise their own taxes to cover basic services. It’s completely backward. Taxpayers expect the state to take care of essential responsibilities first, not to funnel money into new programs while ignoring local needs,” Craney charged.

“Massachusetts doesn’t have a revenue problem, it has a spending problem. The Governor should focus on fiscal discipline and reform, not new ways to nickel and dime residents. The answer to record spending isn’t more taxation, it’s responsible budgeting,”  Craney continued.

“The potential tripling of the vehicle excise tax could mean taxpayers and small businesses see huge increases in their once a year bill. Only in Massachusetts, do you pay taxes on the income you earn for a vehicle purchase, then a sales tax to purchase the vehicle, and a once a year tax for simply owning the vehicle,” added Craney.